Car insurance for new drivers under 25

Young drivers, especially those below the age of 25, often struggle to find affordable car insurance coverage. However, premiums tend to be highest for this age group due to a lack of driving experience, more than age. This leads many young drivers to wonder, “Is it possible to find good auto insurance if I’m under 25?”

The answer is yes, though it can be more difficult depending on your age, gender, and driving experience. To learn more about car insurance premiums for drivers under 25 and for tips on lowering your rates, keep reading.

Factors that influence car insurance rates for under 25

There are several factors that affect a young driver's car insurance rates. Age is only one of them. Here's a detailed look at which factors affect car insurance rates for drivers under 25 and why:

Your age and driving experience

Your driving experience is the most prominent factor used to calculate insurance rates in Canada. As a new driver, you have little to no driving experience, which means your odds of getting into an accident are greater. As such, you are a bigger liability, which is why insurance companies raise your rates.

The reason this is often associated with age is that people can get their learner's permit at 16 years old, which means many new and inexperienced drivers are young. Plus, the statistics don't lie. In Canada, young drivers (ages 16-24) are involved in at-fault accidents far more often than older drivers, and unfortunately, their fatality rate is higher, too.

In fact, according to Mothers Against Drunk Driving (MADD) Canada, young people have the highest rate of traffic-related deaths and injuries per capita compared to any other age group. And when you look at deaths per kilometre driven, they top the charts for all drivers under 75. Among them, 19-year-olds are at the greatest risk, as they’re more likely to be seriously injured or killed in a crash than any other age group.

While a big part of the problem comes down to inexperience, another major factor is that young drivers are more likely to engage in risky driving behaviours, such as speeding, distractions, and sometimes substance use. For example, MADD Canada found that back in 2016, young people aged 16 to 25 made up about 13% of the population, but they accounted for almost 27% of all crash deaths involving alcohol.

However, it's important to note that even if you got your driver's licence at 25 or 35, you'd still be facing much higher premiums than an experienced driver.

Your gender

Another thing that affects car insurance rates for new and young drivers is gender. Male drivers tend to pay more for car insurance than female drivers. This is because young male drivers are statistically more likely to engage in risky driving behaviours, like driving under the influence, speeding, or not wearing a seatbelt, than young female drivers.

According to Tests.ca, in 2015, young males made up a staggering 87% of fatal crashes involving drunk drivers and 89% of those seriously injured.

Going further, according to the Traffic Injury Research Foundation, teenage boys, especially those between 15 and 19, are more likely to be behind the wheel in fatal crashes compared to girls in the same age group. In fact, for 18- and 19-year-old males, about 59% and 61% of all road deaths happened while they were driving. Meanwhile, young females in this age range were more often involved in fatal crashes as passengers rather than drivers.

What vehicle you own

The type of car you drive also plays a big role in your insurance costs. Generally, if you're under 25, choosing a fast, high-performance vehicle will make your insurance way more expensive. That's because sports cars and high-powered engines increase the likelihood of speeding and accidents, so insurers see them as a bigger risk.

On the other hand, driving a safe, practical car with good crash ratings and modern safety features can help lower your premiums. Here’s what insurers consider when looking at your car:

• How much it would cost to repair or replace your vehicle

• If your vehicle has good safety ratings

• If your vehicle is prone to theft

Your driving history

Since young drivers are more likely to engage in risky driving behaviour, this means they're more likely to have a poor driving history. Things like speeding tickets can remain on your driving record for three years, while car accidents remain for six years. Driving convictions and accidents will continue to affect your insurance premiums for as long as they remain on your record. However, if you maintain a clean driving record year over year, you should continue to see your rates drop.

Ways to reduce car insurance premiums for young drivers

There’s no denying that car insurance can be expensive for young drivers. In fact, car insurance rates for drivers under 25 are typically the highest in Canada. Thankfully, there are a few things you can do to minimize how much you spend on car insurance.

Beyond partnering with a trusted brokerage like BrokerLink who can help you find the best coverage at the best rate, there are several other ways to save money on your auto insurance policy. BrokerLink’s expert insurance advisors have compiled a list of their top tips for saving money on car insurance for drivers under 25:

Use a telematics device

If you're a first-time driver looking for a way to lower your insurance costs, using a driving app, such as Intact's myDrive, is one of the best options, especially if you're a safe driver. Since you don’t have much (or any) driving history, your premiums start off high because you haven't proven to insurance companies that you're a safe driver yet. But with usage-based insurance, you can install a telematics device or use a driving app that monitors things like braking, acceleration, and how much you drive.

Doing this can help you save money while also building your driving and insurance history. Just signing up can get you an instant discount of up to 10%, and if you prove you're a safe driver, you could save up to 25% on your rates. For young drivers, it’s one of the most cost-effective ways to lower insurance costs.

Shop around for insurance

Not all auto insurance quotes are the same. You could get a quote from two different insurance providers for the same insurance coverage, yet there could be a several hundred dollar difference between the two. That's why it's important to always shop around for insurance instead of going with the first quote you get. It's best to get several quotes (we recommend at least 3-5) for multiple insurance providers so that you can compare policies and find the one that best suits your needs.

If you need any help with shopping around for insurance quotes, reach out to BrokerLink today. We'll take the time to understand your needs and can do the insurance shopping for you to find you the best car insurance policy at the best price.

Enrol in driving school

Enrolling in an approved young driver's training course or school in Canada is another great way to save money on insurance for a new driver under 25. Insurance companies know that accredited driving courses produce skilled, safe drivers who are more likely to follow the rules of the road. These discounts can vary, but you could save anywhere from 5% to 15%, or even more, depending on your insurance company and the program you complete.

Bundle your insurance policies

This works for all drivers, not just those under 25. If you have multiple insurance policies, such as car insurance and home or tenant insurance, you can often bundle these policies together under the same insurance provider for a significant discount, saving you money on both policies. And if you have multiple vehicles, you can bundle those policies together as well for a multi-vehicle discount.

Increase your deductible

Reduce your insurance premium by increasing your deductible. Doing so will reduce how much you pay for almost any type of insurance. The average car insurance deductible in Canada is $500. By raising your deductible to $1,000 or more, you could save money on your auto insurance policy.

Contact BrokerLink to obtain a free car insurance quote today

Want to learn more about car insurance for young drivers in Canada? You’re in the right place! With over 30 years in business, BrokerLink is a car insurance expert. Our insurance advisors have helped thousands of young drivers across Canada find the right coverage at the lowest possible price.

If you’re a young driver in the market for car insurance, contact BrokerLink today. We can be reached by phone, email, or in person at any of our locations across Canada. You can also use our online quote tool to request a free car insurance quote right now.

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